The company announced on Wednesday that it had reached an agreement to acquire ad-technology company LiveRail, which was backed by Pond Ventures.

Terms of the deal weren’t disclosed. San Francisco-based LiveRail helps media companies sell video ads programmatically. The company, sometimes referred to in ad tech circles as a “supply side” platform, works with clients such as A&E, Univision, Major League Baseball and BET. According to Facebook, LiveRail’s ambition is to become integral to the fast growing online video advertising business.

“What LiveRail ultimately offers is a complete advertising solution for video publishers,” Brian Boland, Vice President of Ads Product Marketing and Atlas at Facebook, wrote in a blog post.

It will be interesting to see how that mission fits in with Facebook. While the social networking giant is ramping up its own Web video ad strategy with auto-play video ads (ads that run automatically on the site when users encounter them in their news feeds) Facebook hasn’t been as focused up to now on helping other media companies make more money with online ads.That of course is something that rival Google has been very focused on (in fact, Google just rolled out an ad exchange specifically for premium video content).

“They may not feel like they are capturing as big a share of video advertising right now, at least where it is moving most rapidly,” theorized Donnie Williams, Chief Digital Officer at Horizon Media. Williams was referring both to original video content, which Facebook doesn’t really do, and video ads sold using sophisticated software and technology.

That said, Facebook continues to push further into programmatic advertising. It manages its own ad exchange and has recently launched a mobile ad network and started targeting its users with ads based in part on their recent Web browsing. Facebook also acquired the ad serving company Atlas from Microsoft in early 2013. That company is mostly focused on display ads rather than video.

“This is an excellent acquisition and consistent with the acquisition of Atlas, indicating an aggressive push to expand Facebook advertising and data to inventory outside of Facebook’s owned media,” said Brian Lesser, CEO of GroupM’s programmatic buying firm Xaxis.

Mike Henry, CEO of the Web video advertising firm Outrigger Media, theorized that Facebook has its eye on expanding its influence in digital advertising. “LiveRail gives them access to video inventory that wasn’t going to happen organically,” he said. “It’s a strong signal that their ad business needs to grow beyond the walls of Facebook.”

“We believe that LiveRail, Facebook and the premium publishers it serves have an opportunity to make video ads better and more relevant for the hundreds of millions of people who watch digital video every month,” Boland wrote. “More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too. Publishers will benefit as well because more relevant ads will help them make the most out of every opportunity they have to show an ad.”

Facebook is saying that LiveRail’s technology makes advertising more relevant and interesting. An obvious question is, could Facebook’s rich trove of data on its users, combined with that technology, make those ads that much more relevant? Facebook isn’t currently positioning the deal that way–but it’s interesting to consider, especially if Facebook wants to challenge Google and others in the emerging battle for Web video ad platform supremacy.

Comments (1 of 1)

The moment you sign up for Facebook, you become Zuckerberg's prostitute. A pimp sells access to the bodies of his girls, Zuckerberg sells access to your eye-balls. Otherwise, the business model is the same. The girls accept the exploitation by the pimp because they are addicted to drugs, which the pimp supplies. Most Facebook users, particularly housewifes, are addicted to gossip, which Facebook supplies.

But what if some other pimp offers better drugs? Will the prostitutes go to him? Will Zuckerberg lose his herd of prostitutes (i mean ... Facebook users), to other social media. He has to stay sharp, and keep the Facebook users dependent on his website.

Next-up, video ads, 2 second sound-bites, and the bored housewives are hooked. Zuckerberg sell them and make money, for a while longer.

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